Correlation Between Canoo Holdings and Malacca Straits
Can any of the company-specific risk be diversified away by investing in both Canoo Holdings and Malacca Straits at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Canoo Holdings and Malacca Straits into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canoo Holdings and Malacca Straits Acquisition, you can compare the effects of market volatilities on Canoo Holdings and Malacca Straits and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Canoo Holdings with a short position of Malacca Straits. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canoo Holdings and Malacca Straits.
Diversification Opportunities for Canoo Holdings and Malacca Straits
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canoo and Malacca is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Canoo Holdings and Malacca Straits Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malacca Straits Acqu and Canoo Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Canoo Holdings are associated (or correlated) with Malacca Straits. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malacca Straits Acqu has no effect on the direction of Canoo Holdings i.e., Canoo Holdings and Malacca Straits go up and down completely randomly.
Pair Corralation between Canoo Holdings and Malacca Straits
Assuming the 90 days horizon Canoo Holdings is expected to under-perform the Malacca Straits. But the stock apears to be less risky and, when comparing its historical volatility, Canoo Holdings is 4.94 times less risky than Malacca Straits. The stock trades about -0.01 of its potential returns per unit of risk. The Malacca Straits Acquisition is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Malacca Straits Acquisition on September 6, 2024 and sell it today you would lose (2.86) from holding Malacca Straits Acquisition or give up 95.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 16.77% |
Values | Daily Returns |
Canoo Holdings vs. Malacca Straits Acquisition
Performance |
Timeline |
Canoo Holdings |
Malacca Straits Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Canoo Holdings and Malacca Straits Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Canoo Holdings and Malacca Straits
The main advantage of trading using opposite Canoo Holdings and Malacca Straits positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canoo Holdings position performs unexpectedly, Malacca Straits can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Malacca Straits will offset losses from the drop in Malacca Straits' long position.Canoo Holdings vs. EVgo Equity Warrants | Canoo Holdings vs. Canoo Inc | Canoo Holdings vs. Paysafe Ltd Wt | Canoo Holdings vs. Aquagold International |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
CEOs Directory Screen CEOs from public companies around the world |